When it comes to long leasehold property in West Kensington, you are actually purchasing a right to live in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than 80 years remaining. Anyone in West Kensington with a lease approaching 81 years left should seriously consider extending it without delay. When a lease has less than 80 years outstanding, under the relevant statute the landlord is entitled to calculate and levy a larger amount, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold premises in West Kensington with over one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Using our service will provide you better control over the value of your West Kensington leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy discussions with the landlord of her leasehold flat in West Kensington, Natalie commenced the lease extension process just as her lease was coming close to the crucial 80-year deadline. The transaction was finalised in April 2005. The freeholder’s charges were kept to an absolute minimum.
In 2014 we were contacted by Mr S Garcia who, having acquired a ground floor apartment in West Kensington in January 1999. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by an additional years. Comparable flats in West Kensington with 100 year plus lease were in the region of £206,200. The mid-range amount of ground rent was £55 invoiced annually. The lease terminated in 2082. Given that there were 56 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 not including legals.
An example of a Lease Extension decision for a West Kensington residence is 93 Oakwood Court in June 2010. the LVT determined that the premium to be paid for the new lease was £492,083, This case related to 1 flat. The unexpired residue of the current lease was 37.79 years.